The crypto lending firm released a detailed timeline showing CEO Zac Prince's pulled millions out of the firm well before its financial troubles began.
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In a bankruptcy court hearing on Monday, crypto lender BlockFi went to some pains to make the case that senior executives — including CEO Zac Prince — did not drain their own funds in advance of filing Chapter 11 on Nov. 28.
With a full accounting of its financial condition due on Wednesday, BlockFi appears to be seeking to get ahead of questions about why Prince withdrew more than $9 million in April, and why the company appeared to pay him and four other executives $15 million in August.
The document "provides all stakeholders with important historical background and context," it tweeted
BlockFi said much the same thing in court.
Revolving Door Payments
The presentation also noted in large, yellow-highlighted text that:
"No member of the BlockFi management team withdrew any cryptocurrency from BlockFi's platform after October 14, 2022, and no member of BlockFi's management team made a withdrawal greater than 0.2 BTC in value at any time after August 17, 2022."
In the first case, Prince withdrew the funds to pay state and federal taxes, the company said.
In the second, the presentation went into great detail of the timeline of a confidential lawsuit settlement in August that was structured so that the $15 million payment was "routed through the executives and ultimately made to the counterparty."
This included about $6 million from Prince, $4 million from co-founder and COO Flori Marquez, and $2 million from chief compliance officer David Spack.
Why BlockFi did not do is explain why the payments were made in that way, which created tax liabilities for the executives, which the company also paid.
Other data released included the losses suffered by more than a dozen executives, with Prince and Marquez between them losing more than $560 million after the FTX transaction that included a $400 million line of credit and the right for Sam Bankman-Fried's company to acquire BlockFi at bargain basement prices.